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tv   [untitled]    July 16, 2012 8:30am-9:00am PDT

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i would like to submit a motion to accept these technical amendments, and our controller is here to talk about what we are introducing today. these technical aspects of the new version. i do believe there was discussion about where my measure is silent on the business tax exemptions that were enacted or have been enacted in the past eight years or so, the mid-market exemptions -- my measure is actually currently silent on this, meaning the it does not actually actively take them away. there is a phase-out of the payroll aspect of our business tax. my measure does not mention taking away the exemptions, but they will be phased out. but i believe there is still
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discussion about continuing those exemptions in the newest version, and i am open to that as a way to actually come to some consensus on a measure going forward. >> thank you -- supervisor chu: thank you. i would ask the controller's office to speak to the specific amendments. it sounds like they are acceptable for both items one and two, so i would like the office to walk through those changes for us. >> good morning, supervisors. we have provided a one-page summary to the committee members, which is also available to the public on the podium of the amendments that have been moved to both measures today. generally speaking, we have organized these into three different buckets, so there are general changes throughout. clean up language, correcting typos, clarify definitions
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versus the amendments introduced a month ago. there are higher registration fees than the initial introduce measures. it would have been paid in fiscal year 2015 -- 2014-2015. although the licensees differ, the schedule of them differs by one year. the phase i and formula, which is critical to the measure had technical errors in the math. those have been corrected now in both measures. secondly, there are changes to the treatment of administrative offices. again in the measures that are before you, if a company finds itself defined as an administrative office, it ends up paying administrative office tax.
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we have placed titers greens regarding the definition of what is an administrative office for purposes of that tax. it now not only requires 50% of a company's payroll expense, but it also has u.s. receipts of over $1 billion and over 1000 employees. we further in this section more clearly define examples of what constitutes an administrative function and what is not an administrative function to provide fleet into greater clarity to taxpayers and make the measure more straightforward to administer for the treasurer's office for purposes of the 50% test. we have excluded stock-based compensation from the payroll based. that is for purposes of determining whether you are an administrative office or not. it does not change the underlying tax, so stock
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compensation remains part of the base for the tax itself should a company find itself in this group. leslie, general clarifications that the administrative office tax shall be calculated on the same means basically as the current payroll tax. there are other changes throughout to clarify or amend what constitutes a taxable receipts, including some additional exclusions and definitions versus the introduction 30 days ago. first of all, a clarification that an individual doing business -- or that an individual in the city doing nothing but managing their own money does not become a taxpayer. we heard this as a possibility from many different taxpayers' reading of the legislation. so we clarified.
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and individuals returns from their own capital are not subject to the tax. next, we have clarified -- and again, i think this is -- was the intent, and clearly was the -- our internal team's intent for the initially drafted legislation, but given some confusion and concern we have heard from taxpayers, we are clarifying that certain activities, the various investment funds in and of themselves, do not establish nexus with the city for purposes of becoming taxpayers. so there are a number of different specific examples in revisions you have before you wear those activities in and of themselves do not mean these kind of very passive investment funds are actually doing business here. third, in this category, we clarified that distributions from a flow through ntt -- entity that has already been
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taxed shall not be taxed another time when they make distributions. again, this is a means of avoiding double taxation as a fund might flop through different legal entities. next, we clarify that gains from the sale of financial instruments in real estate shall be calculated on a net basis. we can talk in greater detail next week regarding the theory behind the taxation for financial services, but it is, generally speaking, treated in other places as a net concept, which means it shall be applied that only to financial instruments sales but also to real estate sales. also, we exclude from taxable receipts tax refunds, governmental grants, so that is a summary of the major changes you see in the amendments before you.
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supervisor chu: thank you very much for that presentation. colleagues, and questions? why don't we open this up for public comment. we will have an opportunity for this item to come before us again next week, but are there any members of the public who wish to speak on items one or two? >> jim lazarus, san francisco chamber of commerce. i want to thank everyone involved for the process that has been under way for months now regarding the redrafting of a business tax structure for san francisco. we have consistently supported an outcome we tax revenues and not job creation. i think we are close to reaching a broad-based agreement on reforms. i had a chance to speak a couple of days ago with a colleague of yours from many years ago who was the author of the gross
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receipts tax in the late 1960's, and that was to replace some lost revenue because of a lawsuit on the city's property- tax formulas for business versus residential property. $35 million was what was needed in the gross receipts tax in the late 1960's. i do want to say that any outcome of this process, which is dealing now with a payroll tax that brings in over $400 million a year, the number two source of revenue behind property-tax for the city, has to be fair and equitable to the broad business community, small business, mid-size, or large business. we have gone into this process with the understanding that on the gross receipts tax rate structure, the goal is revenue neutrality. we support that. we also believe that there is a business license fee structure in the ordinance that has not been adjusted for decades, and there is room for reasonable
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revenue growth in a reasonably restructured business license fee, but i want to make it clear that we do not believe that the change in the court case, 10, 11 years ago left on the table this suppose it $40 million of revenue that the city lost in 2001. in the last 11 years, the rate of inflation on average has been 2.5% in the bay area and in san francisco. yet, the payroll tax growth on average has been 5%, double the rate of inflation. the business community employers in san francisco have paid a fair amount for the privilege of doing business and hiring people in this city. so we want to just keep that on the table, that we believe we can come up with a fair process for gross receipts that minimizes winners and losers because any tax change, even
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revenue neutral for the city, will not be revenue neutral to every taxpayer based on circumstances or gross receipts. we look forward over the next few weeks to working this out and coming back here -- i guess over the next few weeks -- with substantive rate changes and license fee changes that can meet the needs of the city, the needs of your employment community, and that can result in one measure on the ballot, resulting in the removal of the competing transfer tax measures, and we can go forward to passing the measure in november. thank you very much. chu -- supervisor chu: thank you. are there other members of the public who wish to speak on items one or two? seeing none, public comment is closed. supervisor kim: i would like to
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introduce an amendment for item two, which is the business and tax code, the one that is being co-sponsored by supervisor avalos and myself. i would like to add in the same language that is currently in the mayor's proposal and president chiu's proposal amount tax exclusions that have been put in. supervisor chu: to the city attorney or controller's office, would you indicate what that language looks like? >> do you know what section you are talking about? it would help us go through supervisor kim: i am looking right now.
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>> hold on. we have to locate the language. >> i am looking for it as well. my apologies. i should have brought copies with me. i merely want to replicate that language said that it is identical on both charter amendments. supervisor chiu: i believe part of it starts and section 921 with the charter amendment, but i will look for other pieces.
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>> supervisors, the language you are referring to, i believe, is section 960. i believe those are the existing payroll tax-based exclusions. supervisor chu: to be clear, you said page 28? >> yes. supervisor chu: what was the
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other one? >> page 28, section 960, and then page 29, section 961. supervisor chiu: i think that is in the version mayor lee and i have proposed. supervisor chu: it looks like it is on page 27. >> that is the pagination given the amendment that is before you today. supervisor chu: 962, is that correct? supervisor chiu: i think it is 96961. >> i apologize, in the amendment before you today, it is on page 30 and 31. supervisor chu: ok, colleagues.
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looks like what we are looking at, item one does include those sections. item two does have those two sections removed, it looks like. i am imagining your motion is to reassert the same language in section 96961, correct? supervisor kim: yes, that is my motion. just to speak to this motion, this is an issue i have been really thinking about and struggling with over the last couple of weeks as we begin opening of discussions around tax exclusions that were already controversial previously, and after some discussions with some of our companies that do currently benefit from these tax exclusions -- i just have to say i have always been very clear that if we ever reform how we do business tax, that these tax exclusions might not continue, but in conversations i have had,
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because some of these companies also are trying to continue community benefits or begin them and work on relationships with neighborhoods and communities that they are in, i thought that it was important to be able to continue that, regardless of which measure moves forward. i think these companies have also offered kind of in their good faith both support for these efforts in november and also their ability to partner with generally like to initiate. supervisor avalos: 90. these amendments -- sank you. these amendments i will accept in a measure -- thank you.
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these amendments i will accept in a measure i am is sponsoring. the discussion we have had around payroll tax exemptions, whether it was clean tech, biotech, enterprise, or amid market was really about trying to do something around the payroll tax that was inhibiting job creation. while we are replacing the payroll tax with a gross receipts tax, i do believe we are doing that, but a thing the argument supervisor kim has put forward that there already is something in process between the community and business groups moving into the area means we should allow the process to go forward. i also believe if we are going to be able to find consensus around having one measure going forward, this is something that i believe is a minor part of that discussion that i am
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willing to see going forward continuing the business tax exemption so we can be more successful. supervisor chu: thank you. looks like there's a number of motions on the floor. i want to articulate them again. i believe that there is a motion to accept the amendment as a whole of the documents we have talked about. they are primarily technical in nature, have general changes to some cleanup language, administrative language, and other receipts and exclusions, so these i believe are fine for both measures, so there is a motion to amend both items one and tip o'neill. finally, there is a motion on the floor to add items for sections 96961 into item two. i would also say if we could amend that motion to allow the city attorney and controller's
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office to allow any legislation necessary to implement that that they can go ahead and do that. i apologize, we should have done this in advance, but it was a last-minute amendment that i wanted to motion for this morning after some conversations i have had, so if we could work with the controller's office, we are happy to work with you on at least ensuring uniformity of that aspect. supervisor chu: thank you, supervisor. can we take those motions without objection? that will be the case appeared on the two items as a minute, can we continue this to wednesday july 18? we have that motion? we will do it without objection. thank you. do we have any other items before us? >> that completes our agenda.
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supervisor chu: thank you. we are adjourned.
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>> hello. you're watching the show that explores san francisco's love affair with food. there are at least 18 farmers
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markets in san francisco alone, providing fresh and affordable to year-round. this is a great resource that does not break the bank. to show just how easy it can be to do just that, we have come up with something called the farmers' market challenge. we find someone who loves to cook, give them $20, and challenge them to create a delicious meal from ingredients found right here in the farmer's market. who did we find for today's challenge? >> today with regard to made a pot greater thanchapino. >> you only have $20 to spend. >> i know peter it is going to be tough, but i think i can do it. it is a san francisco classic. we are celebrating bay area food.
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we have nice beautiful plum tomatoes here. we have some beautiful fresh fish here. it will come together beautifully. >> many to cut out all this talk, and let's go shop. yeah. ♪ >> what makes your dish unique? >> i like it spicy and smoky. i will take fresh italian tomatoes and the fresh seafood, and will bring them to other with some nice spoked paprika and some nice smoked jalapeno peppers. i am going to stew them up and get a nice savory, smoky, fishy, tomatoy, spicy broth. >> bring it on. how are you feeling? >> i feel good. i spent the $20 and have a few
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pennies less. i am going to go home and cook. i will text message u.n. is done. >> excellent and really looking forward to it. >> today we're going to make the san francisco classic dish invented by italian and portuguese fishermen. it'll be like a nice spaghetti sauce. then we will put in the fish soup. the last thing is the dungeon as crab, let it all blend together. it will be delicious. when i could, i will try to make healthy meals with fresh ingredients, whatever is in season and local. those juicy, fresh tomatoes will take about an hour to cook down into a nice sauce. this is a good time to make our fish stock. we will take a step that seems like trash and boil it up in water and make a delicious and they speed up my parents were great clerics, and we had wonderful food. family dinners are very important. any chance you can sit down together and have a meal together, it is great communal
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atmosphere. one of the things i like the most is the opportunity to be creative. hello. anybody with sets their mind to it can cut. always nice to start chopping some vegetables and x and the delicious. all this double in view is this broth with great flavor. but your heart into it. make something that you, family, and friends will really enjoy. >> i am here with a manager at the heart of the city farmer's market in san francisco. thank you for joining us. tell us a little bit about the organization. >> we're 30 years old now. we started with 14 farmers, and it has grown out to over 80. >> what is the mission of the organization? >> this area has no grocery store spiller it is all mom-and- pop stores. we have this because it is needed. we knew it was needed. and the plaza needed somebody.
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it was empty. beautiful with city hall in the background. >> thank you for speaking with us. are you on the web? >> yes, >> check them out. thank you. >> welcome. the dish is ready. >> it looks and smells amazing. >> thank you. it was not easy to meet the $20 budget. i checked everybody out and found some great produce. really lovely seafood. i think that you are going to love it. >> do not be shy. cyou know this can run you $35 to $45 for a bowl, so it is great you did this for $20. >> this will feed four to six people. >> not if you invite me over for dinner. i am ready to dig in.
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>> i hope you'll love it. >> mmm. >> what do you think? >> i think i am going to need more. perhaps you can have all you want. >> i am produce the that you have crushed this farmer's market challenge by a landslide. the first, we're going to have to tally of your shopping list and see what you actually spend that the farmer's market. >> and go for it. >> incredible. you have shown us how to make super healthy, refresh chapino from the farmers market on the budget, that for the whole family. that is outstanding. >> thank you peter i am glad that you like it. i think anybody can do it. >> if you like the recipe for this dish, you can e-mail us at or reach out to
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us on facebook or twitter and we >> welcome to culture wire. we will look at the latest and greatest public art project. recently, the airport unveiled the new state of the art terminal. let's take a look. the new terminal service and american airlines and virgin america was designed by a world- renowned architecture's firm. originally built in 1954, the building underwent massive renovation to become the first registered terminal and one of
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the must modern and sustainable terminals and the united states. the public art program continues its 30-year legacy of integrating art into the airport environment with the addition of five new commissions that are as bold and dynamic as the new building. >> this project was completed in record time, and we were able to integrate the artist's early enough in the process that they could work with the architect said that the work that is completed is the work that really helps complement and instill the space as opposed to being tucked away in a corner. >> be experience begins with the glass facades that was designed with over 120 laminated glass panels. it captures the experience of being under or over